Customs duties
American customs duties lower mortgage rates in Switzerland
Fixed mortgage rates fall at rarely seen levels, reaching 1.4% over ten years. Experts see it as a gold opportunity for owners.
Owners can currently contract a mortgage over ten years at an average interest rate of 1.75%.
Urs jauda/tamedia
- Fixed mortgage rates at ten years decreased by 0.05% in two weeks.
- The BNS could lower its key rate against the economic slowdown.
- Experts do not exclude a continuation of the drop in mortgage rates.
THE mortgage rate in the long term are affected by high American customs duties. According to an assessment of the newspaper “Finanz und Wirtschaft”, fixed mortgage rates at ten years fell on average 0.05 percentage points in the last two weeks, to be 1.75%. The mortgage broker hypotheke.ch notes a drop of 0.09 percentage points. “It’s a lot for such a short period,” said Florian Schubiger, its director. It is even possible to obtain external funding over ten years to 1.4%, he explains.
What is the link with customs duties?
High customs duties of 39% weigh on the Swiss export economy. The economic slowdown should push the Swiss National Bank (ENB) to take countermeasures sooner or later. A weaker franc would contribute to it. One of the ways to achieve this goal would be to buy currencies. But these mechanisms are delicate because the United States could see a “manipulation of courses”. Switzerland has therefore been placed under surveillance. This is why the SNB will probably lower its key rate in the event of an economic slowdown. This trend results in a drop in interest rates for long -term mortgages.
Saron unchanged despite customs duties?
The key rate of the BNS directly influences only the Saron, that is, the benchmark rate of the Swiss money market. For longer term mortgages, interest rates only fluctuate according to rational expectations, which can evolve at any time. According to current forecasts, long -term real estate credit interest rates continue to be downward.
This evolution of swap interest rates has been emerging for a few weeks already. The rate swaps are mainly negotiated on the over -the -counter market. They indicate the long -term refinancing costs of banks. When swaps are low, banks can offer mortgages at advantageous rates. They serve as reference to banks, which add their margins to fix the final interest rate of a fixed rate mortgage.
What should owners do?
According to Florian Schubiger, the current context of interest rates offers an ideal opportunity to negotiate advantageous long -term conditions. In recent days, transactions have multiplied.
With a loan over ten years at 1.4%, we get closer to saron mortgages, which are on average 1.16%, according to the rates published by banks. For a relatively low additional cost, the owners thus benefit from security in terms of planning for several years. The lower limit of the saron should be reached. Indeed, these 1.16% correspond to the usual margin invoic by banks. Even if the key rate becomes negative, financial institutions continue to apply a zero floor rate to calculate their margin, according to the expert.
How to consider the continuation of mortgage rates?
The analyst does not exclude that long -term mortgage interest rates continue to drop. However, it considers it unlikely that mortgage At ten years ago under the 1%bar. “This would take a lot of things to happen.” This situation would be possible if the key rate remained permanently negative and if the pension funds as well as the provident foundations offered their liquidity on increasingly attractive conditions.
But Florian Schubiger believes that there is a “fairly great probability” that mortgage rates go up, their development depending on many difficult factors. Despite various imponderables, it is therefore possible to currently take out long -term mortgages on relatively advantageous conditions.
Translated from German by Emmanuelle Stevan
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